As landmark legislation looms to safeguard the crypto industry, we spoke to Coinbase’s Daniel Seifert about the ever-evolving world of currency, cryptographic assets and the possibility of a cashless future.
Crypto assets have been making headlines in recent years, and not always in the best light. In 2022 for example, the value of nearly all cryptocurrencies plummeted with many investors losing millions as a result.
Not to mention the major scandal of crypto exchange FTX, which fell into bankruptcy at the end of last year and major flags were raised around how customer funds were handled. Now, coming up to a year later, its founder Sam Bankman-Fried has been found guilty of all seven charges brought against him, including conspiracy to commit wire and commodities fraud and conspiracy to commit money laundering.
But amid one of the biggest fraud cases in history, regulation has been steadily rolling in. Earlier this year, EU lawmakers approved a landmark piece of legislation for governing and safeguarding the crypto industry.
The legislation, known as MiCA, creates a set of common rules around the supervision of crypto assets and cryptocurrencies. The legislation also creates new rules on consumer protection, market manipulation, financial crime and environmental safeguards and is designed to help tame what has become known as the wild west of crypto.
These regulations are designed specifically to prepare for a future with crypto assets and crypto markets. This, in turn, will help create a framework for a financial future that includes these digital currencies as well as blockchain, the technology behind it.
One major player within this space is crypto exchange Coinbase. Founded in San Francisco in 2012, Coinbase has grown to become the largest crypto exchange in the US. Just last month, the exchange chose Dublin, Ireland as its main EU regulatory hub as it aims to expand in Europe amid growing scrutiny in the US.
Daniel Seifert, vice-president and regional managing director of EMEA at Coinbase, says the company’s mission is to “increase economic freedom worldwide” and believes this can be done through the transformative power of blockchain technology.
While the first familiar term around anything crypto-related might be bitcoin for many, Seifert points out that researchers in that space were working on this technology long before bitcoin, but that bitcoin could still be seen as a “decisive inflection point”.
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From there, the advent of blockchain introduced assets that were trustless and permissionless, laying the foundation for the crypto industry. Ethereum – another cryptocurrency with more use cases than bitcoin – further pushed the envelope by introducing smart contracts. However, rapid adoption led to scalability challenges, prompting the development of Layer 2 solutions, enabling lightning-fast transactions on the original blockchains.
This, he says, will lead to many more use cases in the future and much more adoption of blockchain as a technology. “When I’m thinking about a remittance use case, I’m trying to send money from one country to another. If that is within the European Union, it’s fairly good, it’s fairly easy, fairly standardised [because] there’s a single European payments area,” he says.
“But once I go outside of the European Union, it becomes a very costly process. It can take multiple days. I’ve sent the money, but it hasn’t arrived yet. I don’t know where it is, is it still in the process? Whereas if I’m using blockchain technology, basically the minute I send it, it can arrive on the other side of the world almost instantly, and I can publicly track that this is actually taking place.”
Beyond Europe, Seifert says people in regions with limited access to traditional financial services are discovering the benefits of blockchain and crypto. “In this part of the world, people typically have access to infrastructure…but there are many parts of the world where this is difficult, and we do see in a number of markets…[people] discover blockchain and blockchain-based technologies and cryptographic assets for themselves and start to use these. So, this is a very organic growth that we’re seeing at the moment.”
On a personal note, Seifert expresses his enthusiasm for a cashless society, inspired by countries like Sweden where cash is rarely accepted. “Sweden is certainly one of the more inclusive societies in the sense that they have a great welfare state. They’re a role model for many countries worldwide.”
Watch the full interview learn about the work Coinbase is doing with blockchain technology, why it chose Dublin for its new European hub and how accessibility and financial inclusion come into play with this emerging tech.
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